Report on the Thematic Review of Insurance Managers' Client Take On Procedures (2015-07-24)

Summary

This is a thematic review report in which the Guernsey Financial Services Commission summarises findings from onsite visits to a sample of licensed Insurance Managers during April and May 2015, focused on client sourcing and take-on procedures. It sets out good practices observed and areas needing improvement, closing with a summary list of recommended actions for Insurance Managers.

• Good practice observed: Face to face meetings with prospective clients, generally clear and consistently followed take-on procedures, separation of new business and compliance functions, four eyes review of client files, and consideration of reputational risk to the Manager and the Bailiwick.
• Areas for improvement: Applications to the Commission are sometimes lower quality than the underlying take-on work and should be complete stand-alone documents; there is over-reliance on the Commission's prior licensing approval when assessing transfers of business between Managers; outsourced compliance functions often focus narrowly on AML/CFT rather than the wider business; four eyes reviews sometimes lack genuine challenge.
• Recommended actions for Insurance Managers: Meet prospective clients face to face; separate new business and compliance functions; conduct a robust four eyes review of applications; consider the reputation of the Bailiwick when assessing new business; maintain a clear risk appetite and risk register; avoid relying on the Commission's prior approval or no-objection as a substitute for due diligence; and consider the limitations of outsourced compliance arrangements.

The report is informational and reflects the Commission's observations from a specific thematic exercise rather than new binding rules; licensees identified as needing improvement had already been contacted separately by the Commission.

Applies to

Insurance Managers